Boeing 787 mishaps reset the confidence clock

Commentary: Latest technical problems take a toll on shares

SAN FRANCISCO (MarketWatch) — The level of alarm must be about equally divided Tuesday among Boeing Co. engineers, executives and investors.

More troubles With Dreamliner

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Airlines are continuing to have problems with the new Boeing Dreamliner after a fire on Monday and a fuel leak on Tuesday. (Photo: AP)

Boeing
BA, +0.81%
shares fell 2.6% Tuesday on news of yet another equipment malfunction on one of its flagship 787 Dreamliners.

This time the problem was a fuel leak on a 787 belonging to Japan Airlines Co. Ltd.
9201, -0.64%
The loaded aircraft, bound for Tokyo from Boston’s Logan International Airport, never left the ground. With fuel spilling from one wing, it promptly returned to the terminal; no one was hurt. On Monday, crew members reported an electrical fire on another Japan Airlines 787, also at Logan, while the aircraft was at the gate. The passengers already had left the plane and no one was injured.

But the combined two-day damage from these two incidents is a 4.6% drop in Boeing’s share price. Translated to market cap, that’s about a $2.6 billion hit.

Aerospace-industry experts caution against reading too much into these issues. They say the 787 is still a relatively new aircraft, so it’s bound to have teething problems. It also carries a lot of technology previously untested in commercial aviation, which means more things to go wrong.

Reuters

Boeing Dreamliner 787-800

But that’s not much comfort to investors, especially considering only 49 Dreamliners have been delivered since the plane’s first commercial flight in late 2011.

Even those who stuck by Boeing through more than three years of 787 production delays have to be a bit unnerved by these latest problems. After all, these aren’t test flights. These planes now carry corporate logos and paying passengers, so the stakes are extremely high in the event something more serious goes wrong.

The only way Boeing can assuage these misgivings is through proven, trouble-free operation. But every time a 787 has a little glitch, it resets the confidence clock, and that affects anyone flying on a 787, any airline thinking about ordering one and anyone thinking about investing in Boeing.

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